The commercialisation agreement will open more doors to markets for Galan’s lithium concentrate. Pic via Getty Images.
Mining
Special Report: Lithium brine-focused Galan Lithium has signed a pivotal commercial agreement with the Catamarca government for both domestic and international export of concentrate from its Hombre Muerto West (HMW) project in Argentina, providing it with much bigger market access.
Galan Lithium’s (ASX:GLN) 7.9Mt HMW project in Argentina’s slice of South America’s Lithium Triangle is a four-phase lithium brine development with a final production target of 60,000tpa lithium carbonate equivalent (LCE) by 2030.
A definitive feasibility study (DFS) update last year has earmarked attractive economics for the project, with Phase 1 to target 5,400tpa LCE, Phase 2 production of 21,000tpa LCE in 2026, 40,000tpa by 2028 for Phase 3 and 60,000tpa LCE for Phase 4 which will include its other brine project Candelas – taking that total up to 8.6Mt.
GLN is already filling the ponds as part of its Phase 1 target and is on track to come online in H1 2025.
The commercial agreement with the Catamarca Government to facilitate the commercialisation of lithium chloride concentrate from HMW is a significant milestone in Galan’s project strategy and will provide access to larger customer bases both domestically and internationally.
It also contains provisions for potential advance payments and an increase in royalty rates to 7% – similar to successful regimes in Australia which catapulted it to becoming the largest lithium exporter in the world.
In terms of product downstream, Galan says it expects to produce both lithium carbonite and/or hydroxide – further increasing its market exposure.
Galan will commit to exploring downstream processing routes after four years, aimed at expanding lithium production capabilities beyond the HMW salar and GLN intends to offer priority to a collaboration with the Catamarca government agency.
The agreement also facilitates the granting of Phase 2 permits, potentially enabling the continuation of Phase 2 construction.
Catamarca Governor Raúl Jalil and Galan MD Juan Pablo Vargas de la Vega. Pic supplied: (GLN)
Galan Managing Director Vargas de la Vega says the company looks forward towards achieving mutually beneficial and sustainable outcomes through the further downstream development of lithium processing routes such as lithium carbonate, hydroxide or other alternatives in Catamarca.
“This commercial agreement is an important milestone in implementing Galan’s strategy, providing access to a larger international customer base at potentially improved sales and funding/prepayment terms,” he said.
“The agreement is expected to provide tangible progress towards the granting of Phase 2 permits on our journey to becoming the next lithium producer in Argentina.
“We are proud of our long-term relationship with the Government of Catamarca and local communities in Argentina.
“The agreement reflects the mutual respect and trust we have established and the commitment we all have to maximising the short, medium and long-term economic opportunities at the HMW project.”
What’s next?
Galan is now turning its focus to securing permits to advance Phase 2 construction of HMW.
This article was developed in collaboration with Galan Lithium, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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